It must be uncomfortable to be a crypto investor these days. Bitcoin is down 65% year to date. and someone said that this is not a “crypto future” but a “crypto extinction.”
But one expert remains bullish: Ark Invest’s Cathie Wood.
When asked if he still holds bitcoin’s prediction of $1 million per coin by 2030 during a Bloomberg interview, he replied “yes.”
“Sometimes you have to try to fight, you have to go through a crisis to see the survivors first,” he said.
Don’t miss it
Wood admits that the ongoing crypto crisis may delay institutional adoption, but still thinks that bitcoin will come out “smelling like a rose”.
“If they actually do their homework and see what’s going on here, I might be more inclined to go to bitcoin and maybe ether as a first stop.”
Considering that bitcoin is currently trading around $16,400, his $1 million price target represents a potential upside of 5,998%.
As always, Wood puts his money where his mouth is. Here’s a look at how super investors are betting on crypto.
Grayscale Bitcoin Trust (GBTC) price live chart
With the rise of bitcoin over the past few years, several bitcoin funds have entered the market. Grayscale Bitcoin Trust is one of them.
According to GBTC, the stock aims to reflect the value of bitcoin ownership, less fees and expenses. The fund said it was unable to meet that goal because the shares had been trading at a premium or discount to that value that was “sometimes very substantial.”
Year to date, GBTC shares are down 75%.
The bankruptcy of the FTX cryptocurrency exchange has sent shockwaves through the crypto space and this is one of the reasons why investors are dumping GBTC shares. As a result, GTBC is trading at a deep discount to its underlying asset – bitcoin.
The discount caught Wood’s attention. It was reported on Monday that Ark Investment Management acquired 176,945 GBTC shares, worth about $1.5 million.
Coinbase Global (COIN)
If you’ve ever bought bitcoins from an exchange before, you know that there are usually transaction fees. And as more and more people rush to buy cryptocurrencies, the transaction fees quickly add up.
That’s where Coinbase found the opportunity. As the largest digital currency exchange in the US, it earns a transaction fee every time someone buys or sells digital currency on the exchange.
In Q3, Coinbase had 8.5 million users transacting monthly. It earned $366 million in transaction revenue and $211 million in subscription and services revenue.
Given the decline in cryptocurrencies, it’s no surprise that Coinbase shares have also experienced severe volatility – down 82% in 2022.
But the company remains in Wood’s portfolio. Flagship fund Ark Invest Ark Innovation ETF ( ARKK ) holds more than 5.9 million shares of Coinbase, worth about $257.1 million.
Wood’s Ark Innovation ETF also owns 6.26 million shares of Block, the digital payments technologist formerly known as Square.
With shares worth $392.7 million, Block is now ARKK’s fifth largest shareholder.
Management changed the name last December because “Square” has become synonymous with the company’s grocery business. But the move did not please investors. By 2022, the stock had fallen by more than 60%.
While the company is far from the current market favorite, it continues to post some very impressive numbers.
In Q3, total net revenue increased 17% year over year to $4.52 billion. Gross profit came in at $1.57 billion, up 38% from a year ago.
The company also plays in cryptocurrency: for the quarter, Block generated $1.76 billion in bitcoin revenue and $37 million in bitcoin gross profit.
What to read next
This article provides information only and should not be considered advice. This is provided without warranty of any kind.